C211 GLOBAL ECONOMICS FOR
MANAGERS PREP EXAM Questions
and Answers Latest Updates 2025
TOP RATED A+
price elasticity of demand - ANSa measure of how much the quantity demanded of a good
responds to a change in the price of that good, computed as the percentage change in
quantity demanded divided by the percentage change in price
total revenue - ANSthe amount paid by buyers and received by sellers of a good, computed
as the price of the good times the quantity sold
income elasticity of demand - ANSa measure of how much the quantity demanded of a good
responds to a change in consumers' income, computed as the percentage change in
quantity demanded divided by the percentage change in income
cross-price elasticity of demand - ANSa measure of how much the quantity demanded of
one good responds to a change in the price of another good, computed as the percentage
change in quantity demanded of the first good divided by the percentage change in price of
the second good
price elasticity of supply - ANSa measure of how much the quantity supplied of a good
responds to a change in the price of that good, computed as the percentage change in
quantity supplied divided by the percentage change in price
total cost - ANSthe market value of the inputs a firm uses in production
total revenue - ANSthe amount a firm receives for the sale of its output
profit - ANStotal revenue minus total cost
explicit costs - ANSinput costs that require an outlay of money by the firm
implicit costs - ANSinput costs that do not require an outlay of money by the firm
economic profit - ANStotal revenue minus total cost, including both explicit and implicit costs
accounting profit - ANStotal revenue minus total explicit cost
,production function - ANSthe relationship between quantity of inputs used to make a good
and the quantity of output of that good
marginal product - ANSthe increase in output that arises from an additional unit of input
diminishing marginal product - ANSthe property whereby the marginal product of an input
declines as the quantity of the input increases
fixed costs - ANScosts that do not vary with the quantity of output produced
variable costs - ANScosts that vary with the quantity of output produced
average total cost - ANStotal cost divided by the quantity of output
average fixed cost - ANSfixed cost divided by the quantity of output
average variable cost - ANSvariable cost divided by the quantity of output
marginal cost - ANSthe increase in total cost that arises from an extra unit of production
efficient scale - ANSthe quantity of output that minimizes average total cost
economies of scale - ANSthe property whereby long-run average total cost falls as the
quantity of output increases
diseconomies of scale - ANSthe property whereby long-run average total cost rises as the
quantity of output increases
constant returns to scale - ANSthe property whereby long-run average total cost stays the
same as the quantity of output charges
, competitive market - ANSa market with many buyers and sellers trading identical products
so that each buyer and seller is a price taker
average revenue - ANStotal revenue divided by the quantity sold
marginal revenue - ANSthe change in total revenue from an additional unit sold
sunk cost - ANSa cost that has already been committed and cannot be recovered
monopoly - ANSa firm that is the sole seller of a product without close substitutes
natural monopoly - ANSa monopoly that arises because a single firm can supply a good or
service to an entire market at a smaller cost than could two or more firms
price discrimination - ANSthe business practice of selling the same good at different prices
to different customers
oligopoly - ANSa market structure in which only a few sellers offer similar or identical
products
monopolistic competition - ANSa market structure in which many firms sell products that are
similar but not identical
game theory - ANSthe study of how people behave in strategic situations
collusion - ANSan agreement among firms in a market about quantities to produce or prices
to charge
cartel - ANSa group of firms acting in unison
Nash equilibrium - ANSa situation in which economic actors interacting with one another
each choose their best strategy given the strategies that all the other actors have chosen
prisoners' dilemma - ANSa particular "game" between two captured prisoners that illustrates
why cooperation is difficult to maintain even when it is mutually beneficial
dominant strategy - ANSa strategy that is best for a player in a game regardless of the
strategies chosen by the other players
budget constraint - ANSthe limit on the consumption bundles that a consumer can afford
indifference curve - ANSa curve that shows consumption bundles that give the consumer the
same level of satisfaction
marginal rate of substitution - ANSthe rate at which a consumer is willing to trade one good
for another
MANAGERS PREP EXAM Questions
and Answers Latest Updates 2025
TOP RATED A+
price elasticity of demand - ANSa measure of how much the quantity demanded of a good
responds to a change in the price of that good, computed as the percentage change in
quantity demanded divided by the percentage change in price
total revenue - ANSthe amount paid by buyers and received by sellers of a good, computed
as the price of the good times the quantity sold
income elasticity of demand - ANSa measure of how much the quantity demanded of a good
responds to a change in consumers' income, computed as the percentage change in
quantity demanded divided by the percentage change in income
cross-price elasticity of demand - ANSa measure of how much the quantity demanded of
one good responds to a change in the price of another good, computed as the percentage
change in quantity demanded of the first good divided by the percentage change in price of
the second good
price elasticity of supply - ANSa measure of how much the quantity supplied of a good
responds to a change in the price of that good, computed as the percentage change in
quantity supplied divided by the percentage change in price
total cost - ANSthe market value of the inputs a firm uses in production
total revenue - ANSthe amount a firm receives for the sale of its output
profit - ANStotal revenue minus total cost
explicit costs - ANSinput costs that require an outlay of money by the firm
implicit costs - ANSinput costs that do not require an outlay of money by the firm
economic profit - ANStotal revenue minus total cost, including both explicit and implicit costs
accounting profit - ANStotal revenue minus total explicit cost
,production function - ANSthe relationship between quantity of inputs used to make a good
and the quantity of output of that good
marginal product - ANSthe increase in output that arises from an additional unit of input
diminishing marginal product - ANSthe property whereby the marginal product of an input
declines as the quantity of the input increases
fixed costs - ANScosts that do not vary with the quantity of output produced
variable costs - ANScosts that vary with the quantity of output produced
average total cost - ANStotal cost divided by the quantity of output
average fixed cost - ANSfixed cost divided by the quantity of output
average variable cost - ANSvariable cost divided by the quantity of output
marginal cost - ANSthe increase in total cost that arises from an extra unit of production
efficient scale - ANSthe quantity of output that minimizes average total cost
economies of scale - ANSthe property whereby long-run average total cost falls as the
quantity of output increases
diseconomies of scale - ANSthe property whereby long-run average total cost rises as the
quantity of output increases
constant returns to scale - ANSthe property whereby long-run average total cost stays the
same as the quantity of output charges
, competitive market - ANSa market with many buyers and sellers trading identical products
so that each buyer and seller is a price taker
average revenue - ANStotal revenue divided by the quantity sold
marginal revenue - ANSthe change in total revenue from an additional unit sold
sunk cost - ANSa cost that has already been committed and cannot be recovered
monopoly - ANSa firm that is the sole seller of a product without close substitutes
natural monopoly - ANSa monopoly that arises because a single firm can supply a good or
service to an entire market at a smaller cost than could two or more firms
price discrimination - ANSthe business practice of selling the same good at different prices
to different customers
oligopoly - ANSa market structure in which only a few sellers offer similar or identical
products
monopolistic competition - ANSa market structure in which many firms sell products that are
similar but not identical
game theory - ANSthe study of how people behave in strategic situations
collusion - ANSan agreement among firms in a market about quantities to produce or prices
to charge
cartel - ANSa group of firms acting in unison
Nash equilibrium - ANSa situation in which economic actors interacting with one another
each choose their best strategy given the strategies that all the other actors have chosen
prisoners' dilemma - ANSa particular "game" between two captured prisoners that illustrates
why cooperation is difficult to maintain even when it is mutually beneficial
dominant strategy - ANSa strategy that is best for a player in a game regardless of the
strategies chosen by the other players
budget constraint - ANSthe limit on the consumption bundles that a consumer can afford
indifference curve - ANSa curve that shows consumption bundles that give the consumer the
same level of satisfaction
marginal rate of substitution - ANSthe rate at which a consumer is willing to trade one good
for another
